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Wichita city government

Naftzger Park, according to Wichita Mayor Jeff Longwell

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He had an opportunity to learn the true history of Naftzger Park in downtown Wichita. But Mayor Jeff Longwell didn’t learn, or maybe he doesn’t care.

In March, Wichita Mayor Jeff Longwell answered a question about Naftzger Park, telling viewers of the KPTS Television program Call the Mayor that:

“Actually what we found out is when our city fathers put in that park years ago they put the park in on private development land and so the development’s actually not on Naftzger Park. Naftzger Park used to be planted on private development land and so they had to change the boundaries of the park.”

The mayor blamed past city administrations for not being to read a survey. (Click here to view the video starting with this question.)

Chase M. Billingham, who is assistant professor of sociology at Wichita State University, has researched the history of this part of downtown. 1 He submitted a piece to the Wichita Eagle shortly after that episode of Call the Mayor aired. He wrote:

This claim — that the public park was erroneously built on privately owned land — has been one of the most common arguments offered by city officials in favor of their strategy to bulldoze Naftzger Park and rebuild it on a new footprint. This argument has been voiced repeatedly by elected officials and city staff during City Council meetings and public hearings. As the developers of the Spaghetti Works property have begun to build a new mixed-use development there, the city has maintained that it must fix that previous error and restore the developers’ property rights by relinquishing Naftzger Park’s eastern edge.

The claim that Naftzger Park was built on private land is wrong, however, and it epitomizes the disregard for history and due diligence that has characterized much of the city’s disjointed effort to overhaul this key public downtown space.

Billingham then explained the documented history of land ownership in the area, with the upshot being this: “As a result, small areas on the eastern edge of the park did, indeed, sit on privately owned land. But it was not because the park was built on private land; instead, it was because Wichita sold parts of its own public park to private owners for far less than it had paid for the land just a few years earlier.” (emphasis added)

Concluding, he wrote:

When city officials argue that destroying and rebuilding Naftzger Park was necessary, in part, because their predecessors mistakenly built the public park on private land, they are not being truthful. Among other questions surrounding the demolition of that important public space, then, Wichitans deserve to know why their leaders were so eager to relinquish the public access to this land that they had been entitled to for decades.

Why is this incident from March relevant today, two months later? Because on the May 30, 2019 edition of the monthly show Call the Mayor, Longwell repeated the same falsehood.

I’m reluctant to call someone a liar, as a lie means “a false statement deliberately presented as being true” or “something meant to deceive.” But as Billingham wrote, Wichita city officials, including Longwell, are not telling the truth.

Mayor Longwell, along with other Wichita city officials, had an opportunity to learn the truth in both the online and print editions of the largest newspaper in Kansas. If they did not agree with Billingham’s research and conclusion, there are many ways to have a public dialog on the matter. For example, the city has a popular website and social media presences, with the city’s Facebook page being liked by 27,230 people. 2 The city has a communications staff, including a strategic communications director, marketing services director, assistant director of strategic communications, and communications and special events manager. 3 There is a city manager, assistant city manager, six city council members, and a fleet of bureaucrats.

Don’t any of these people care about the truth? Don’t they want to help the mayor of the city present accurate and truthful information?

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Notes

  1. Billingham is also the author of a fascinating history of the area, but it was published in an academic journal that is not freely available online. See Billingham, C. M. (2017) “Waiting for Bobos: Displacement and Impeded Gentrification in a Midwestern City”, City & Community, 16(2), pp. 145–168. doi: 10.1111/cico.12235. ↩
  2. Facebook, https://www.facebook.com/cityofwichita/, observed on May 31, 2019. ↩
  3. City of Wichita. Meet the Communications Team. Available at https://www.wichita.gov/News/Pages/Team.aspx. ↩
Economics

Wichita jobs and employment, April 2019

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For the Wichita metropolitan area in April 2019, the labor force is up, the number of unemployed persons is down, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows small declines in labor force and jobs from March.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving, but also mixed, employment situation for the Wichita Metropolitan Statistical Area.

Click charts and tables for larger versions.

Total nonfarm employment rose from 298,500 last April to 303,400 this April. That’s an increase of 4,900 jobs, or 1.64 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.76 percent.

The unemployment rate in April 2019 was 3.3 percent, down from 3.5 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force fell by 227 persons (0.1 percent) in April 2019 from March 2019, the number of unemployed persons fell by 97 (0.8 percent), and the unemployment rate was unchanged at 3.7 percent. The number of employed persons not working on farms fell to 299,538 in April from 299,668 the prior month, a decline of 130 persons, or 0.0 percent.

The following chart of the monthly change in labor force and employment shows a general decline over the past year, with some recent months of losses for both measures.

The following chart of changes from the same month one year ago shows a general decline in the rate of growth.

Looking at the charts of changes in employment year-over-year, we see some months in the past year where Wichita outperformed the nation. That last happened in 2012.

This article has been updated to correct a mistake in the original version.

Economics

Wichita population, 2018

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The City of Wichita lost 1,052 in population from 2017 to 2018, a decline of 0.27 percent.

Data released today by the United States Census Bureau shows the City of Wichita losing population from July 1, 2017, to July 1, 2018. 1

The bureau’s estimate of city population on July 1, 2018 is 389,255. This is a decline of 1,052 (0.27 percent) from the year before. These are populations of cities, not metropolitan areas, although the Wichita metropolitan area also lost population. 2

The estimate of population on July 1, 2017 was revised from 390,591 to 390,317, meaning that for 2017, Wichita population declined by 242 from the July 1, 2016 population of 390,509.

With the revised 2017 figure, Wichita has had two years of declining population, as can be seen in the nearby chart.

While Wichita lost 0.27 percent of its population in one year, the top 100 cities gained 0.51 percent. Since 2010, Wichita has grown by 1.71 percent, while the top 100 cities grew by 7.57 percent.

Wichita is the fifty-first largest city, down from fiftieth the two prior years.

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Notes

  1. Annual Estimates of the Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2018 Population: April 1, 2010 to July 1, 2018 Source: U.S. Census Bureau, Population Division Release Date: May 2019 ↩
  2. Weeks, Bob. Wichita population falls; outmigration continues. Available at https://wichitaliberty.org/wichita-government/wichita-population-falls-outmigration-continues/. ↩
Economics

Sedgwick County job growth continues strong pace

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In the fourth quarter of 2018, Sedgwick County continued strong job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, show a continuing strong jobs picture for Sedgwick County.

Data from the Bureau’s Quarterly Census of Employment and Wages (QCEW) program show that from December 2017 to December 2018, Sedgwick County gained 5,500 jobs, which is a rate of 2.2 percent, as calculated by BLS. For the nation, growth was 1.5 percent.

The job growth rate for Sedgwick County was 100th best among the nation’s 350 largest counties.

While the job growth rate in Sedgwick County for the fourth quarter of 2018 exceeded the national rate, for the most recent four quarters the average rate for Sedgwick County was 1.3 percent, and 1.6 percent for the nation.

Average weekly wages in Sedgwick County increased by 3.8 percent over the year to $946. For the nation, wages rose by 3.2 percent to $1,144.

Click charts for larger versions.

Wichita city government

What could be done with WaterWalk

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There is an opportunity for Wichita to break the logjam holding up development at WaterWalk.

Critics of city development projects point to WaterWalk as an example of a failed downtown development. Some $41 million of city funds were spent there with few positive results, With the closing of the Gander Mountain store, its fortunes were trending downwards until the King of Freight deal was announced. Although, it is debatable whether offices are a good use for this property, given its promotion as “Wichita’s Next Great Gathering Place,” a center of retail, entertainment, and residence. 1

The King of Freight deal might be a way to get something from a failed development, at least for now. But the city could do more.

The city has many excuses for the failure of WaterWalk. In a recent social media town hall concerning the new baseball stadium and surrounding development, the city’s attitude was clear: WaterWalk is different, the city says. In the social media town hall, the city stated, “Waterwalk wasn’t the deal we put together nor did it have the safeguards of this project. Waterwalk is not a city owned development.” 2

(While the city criticizes the WaterWalk deal for not having safeguards, the protections built in the baseball deal aren’t very strong. And while the city says “WaterWalk is not a city owned development,” neither is the ballpark land development deal. Remember, the city is selling the land.)

What is the meaning of “we?” True, most current city officials weren’t in office at the time of the WaterWalk deal. KFDI reported “Mayor Longwell said it was unfair to “armchair quarterback” the decision that led to the the Waterwalk, especially since everyone on the council, including the Mayor, were not there for the decisions that led to the Waterwalk.”

Accountability belongs to others is the attitude of Wichita Mayor Jeff Longwell and other city officials.

But there is a grain of truth in the city’s answer. The city granted development rights for the WaterWalk property to a private development group, and there are about 85 years left in the agreement. That group is now headed by Jack P. DeBoer. He is in control of the land and its use.

That’s troubling. Recently DeBoer confessed to being “confounded” by WaterWalk, telling the Wichita Eagle, “It’s a business I don’t know anything about.” 3

DeBoer has had many years to produce development at WaterWalk. He has the ability to earn profit. But having produced very little and being “confounded” by WaterWalk, I think the key to moving forward is for the city to remove DeBoer and his group from the picture.

DeBoer has a long-term development deal with the city. Now he is asking the city to reconfigure a lease in which he is the tenant. Presumably, the changes he wants are worth something to him.

That’s an opportunity for the city to get something in return. I don’t know what that “something” might be, but this is an opportunity for the city to get some type of modification that might lead to progress at WaterWalk.

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Notes

  1. Wichita Mayor Carl Brewer, 2008 State of the City Address. Available at https://www.wichita.gov/Council/CityCouncilDocument/2008%20State%20of%20the%20City%20Address.pdf. ↩
  2. City of Wichita social media town hall on Facebook, March 7, 2019. See https://wichitaliberty.org/wp-content/uploads/2019/03/City-of-Wichita-Facebook-Waterwalk-2019-03-07.png. ↩
  3. Then, of course, there’s his WaterWalk development downtown, which seems to be confounding him a bit.

    “It’s a business I don’t know anything about,” DeBoer says.

    A Bass Pro Shop once was planned for the mixed-use development and a Gander Mountain opened instead and then closed last year.

    “I’ve had opportunities to do, you know, a restaurant or something, and I’ve said, ‘No.’ ”

    DeBoer says he’s willing to take more time to be sure he makes the right decisions.

    “It’s the key piece of land in all of Wichita,” he says. “I don’t want to spend my life screwing it up.” Rengers, Carrie. Jack DeBoer talks life after Value Place and WoodSpring Suites. Wichita Eagle, November 2, 2018. Available at https://www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article220992720.html. ↩

Wichita city government

King of Freight move a step sideways

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A Wichita firm plans to move its offices to what was billed as the city’s premier entertainment district.

King of Freight, a Wichita freight brokerage firm, is planning to move its operations to the vacant Gander Mountain building in WaterWalk. This requires a modification to the lease of the land.

It’s important to recognize that King of Freight is not the tenant in the lease. The landlord is the City of Wichita. The tenant is WaterWalk LLC, a Kansas limited liability company, whose president is Jack P. DeBoer. The lease covers only the land, not the building. The city does not own the building. While the city rents the land to DeBoer, there is undoubtedly a deal between him and King of Freight. Details of that are unknown.

When WaterWalk was conceived, the goal was a destination of retail, entertainment, and residences, and some $41 million of tax money was spent. The original lease for the Gander Mountain ground reflected that. Now, that a non-retail firm will be using the ground, a change was needed.

The reason is that the original lease included a provision for “additional annual rent.” If the business — Gander Mountain — exceeded certain financial parameters, the city could collect additional rent. The additional rent clause was never triggered. Other WaterWalk deals with similar provisions have never paid additional rent, either. 1)

The new lease abolishes the additional rent provision, although it could be reinstated if employment goals are not met. Since the additional rent clause is toothless, so there is no real penalty.

The tenant will continue to pay the city $1 per year in rent. King of Freight will pay $15 per month to use city parking spaces. This is perhaps half the market rate for long-term parking arrangements.

Is the move of King of Freight a good deal for the city and its citizens? King of Freight anticipates adding jobs in the future, and the new lease with the city requires certain job goals to be met. But immediately, the effect is simply moving employees from one downtown office to another. When King of Freight occupies new space, empty space will be left behind.

While putting the Gander Mountain building to use is good, its use as office space moves away from the original concept for WaterWalk, once touted as “Wichita’s Next Great Gathering Place.” 2

Will retail and entertainment establishments wish to locate near an office building? They didn’t want to locate in WaterWalk anyway, so maybe there is no change.

Of interest is DeBoer’s confession of being “confounded” by WaterWalk, recently telling the Wichita Eagle, “It’s a business I don’t know anything about.” 3

Before that, he told the Eagle that whatever becomes of the Gander Mountain building, it will be “something fun and good for the city.” 4

I don’t think that goal has been realized.

Of note: DeBoer told the Eagle he’s had opportunities to “do a restaurant or something,” but he declined. Former Wichita Mayor Carl Brewer, in State of the City addresses, promised specific named restaurants would be opening in WaterWalk. 5

In more detail

Excerpts from the city’s agenda packet for this item:

“The lease’s current rent requirement, which was drafted for a retail use, would be suspended if the job requirement is met, and would terminate in 10 years if KOF and its entities maintains the presence of 400 net new jobs in Wichita through the 10-year period.”

“KOF has also agreed to pay for parking spaces at an initial rate of $15/month per space. Revenue from KOF’s employee parking is estimated at approximately $70,000/year.”

From the lease agreement: “Section 5.01. Minimum Rent. As of the date first written above, Tenant has paid Landlord a minimum fixed annual rent (“Minimum Rent”) of One Dollar ($1) in one (1) installment covering the Term of this Lease as defined in Article I above.”

“Section 5.02. Additional Rent. The Tenant will also pay, without notice, and without abatement, deduction, or setoff, except as otherwise specifically allowed herein, as additional rent, all sums, taxes, assessments, costs, expenses, and other payments which the Tenant in any of the provisions of this Lease assumes or agrees to pay, and, in the event of any nonpayment thereof, the Landlord shall have (in addition to all other rights and remedies) all the rights and remedies provided herein or by law in the case of nonpayment of rent.”

This section then describes the mechanism of calculating “Additional Annual Rent.” This mechanism was crafted for a retail store so that if “Adjusted Net Cash Flow” was ever positive, the city would be paid 25 percent of that. But the activity of the retail store, Gander Mountain, never triggered the payment of additional rent. 6

The section goes on to modify the additional rent provision for uses other than retail, like an office: “No Additional Retail Rent and no Additional Rent involving any payment of any portion of the Adjusted Net Cash Flow shall be owed for any use of the Premises that is not a Retail Use under codes 4400 through 454390 of the 2017 NAICS.”

The property will be paying property taxes: “Section 6.01. Taxes. Tenant shall pay as additional rent during the Term and any extensions thereof, all ad valorem taxes, and all other governmental taxes or charges that may be levied against the Premises.”

Since the property is within a tax increment financing (TIF) district, the taxes flow to that, not to fund the general operations of government.

“Section 9.03. Parking. The parties agree that Tenant’s employees will have nonexclusive access to the 430-space Parking Garage and the 60 spaces of surface parking under U.S. 400 (“Kellogg”) for an initial rate of $15/month per employee for parking between the hours of 8:00 a.m. – 6:00 p.m., Mondays-Fridays. Tenant shall be responsible for providing a monthly report of the number of employees who are parking in Parking Garage and on surface parking lot under Kellogg, and shall remit $15.00 per employee on a monthly basis. At each one-year anniversary of this agreement, the parking rate shall increase 3%.”

“Section 16.06. Assignment; Sublease. Tenant may freely assign or sublease all or any portion of the Premises without Landlord’s consent.”

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Notes

  1. Weeks, Bob. Wichita WaterWalk contract not followed, again. Available at https://wichitaliberty.org/wichita-government/wichita-waterwalk-contract-not-followed/. ↩
  2. Wichita Mayor Carl Brewer, 2008 State of the City Address. Available at https://www.wichita.gov/Council/CityCouncilDocument/2008%20State%20of%20the%20City%20Address.pdf. ↩
  3. Then, of course, there’s his WaterWalk development downtown, which seems to be confounding him a bit.

    “It’s a business I don’t know anything about,” DeBoer says.

    A Bass Pro Shop once was planned for the mixed-use development and a Gander Mountain opened instead and then closed last year.

    “I’ve had opportunities to do, you know, a restaurant or something, and I’ve said, ‘No.’ ”

    DeBoer says he’s willing to take more time to be sure he makes the right decisions.

    “It’s the key piece of land in all of Wichita,” he says. “I don’t want to spend my life screwing it up.” Rengers, Carrie. Jack DeBoer talks life after Value Place and WoodSpring Suites. Wichita Eagle, November 2, 2018. Available at https://www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article220992720.html. ↩

  4. “It’s a great building,” DeBoer says.

    “It’s just scratch your head, now what the hell’s going to happen?” he says. “We will come up with a plan.”

    The “we” includes George Laham of Laham Development and J.P. Weigand & Sons.

    “George and his team are the best,” DeBoer says.

    “Everything’s on the table.”

    That includes potential office, retail or entertainment uses – and a possible redesign for the building to make better use of the river behind it.

    “We just have to be sure of the direction,” DeBoer says. “We’re going to be very careful and think it through.”

    Whatever it is, he says that it will be “something fun and good for the city.”

    “We don’t have to depend on a guy who’s not as interested as we are.” 3. Rengers, Carrie. WaterWalk owner to make new plans for Gander Mountain building. Wichita Eagle, September 11, 2017. Available at https://www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article172482736.html. ↩

  5. In his 2008 address, Brewer promised specific development at the struggling Waterfront development, which is heavily subsidized. Beaming with pride, Brewer said to the audience: “And, great strides are being made at Wichita Waterwalk. The topping out ceremony for Waterwalk Place is scheduled for this Thursday and I invite everyone to this event. I am pleased to announce two more national tenants that will be a part of the WaterWalk restaurant and entertainment development. … I am pleased to announce two more national tenants that will be a part of the WaterWalk restaurant and entertainment development. Joining Saddle Ranch Chop House will be Funny Bone Comedy Club and Wet Willies restaurant and daiquiri bar. These are just a couple of the fun and exciting tenants that will help make WaterWalk — Wichita’s Next Great Gathering Place.” This address was delivered a year before DoBoer took full control over WaterWalk, although he was involved before that. ↩
  6. Email with Wichita City Manager Layton, May 10, 2019. ↩
Economics

Wichita personal income growing, but slowly

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Among the nation’s 383 metropolitan areas, Wichita ranked 347th for personal income growth.

Statistics released today by the Bureau of Economic Analysis, an agency of the United States Department of Commerce, show personal income in the Wichita metro area growing at a slow rate.

The figures released today are through calendar year 2017. For that year, personal income in the Wichita metropolitan statistical area was $30,801 million, up 2.3 percent from $30,103 million the previous year. These are current dollars.

Using inflation-adjusted dollars, income growth was 0.7 percent.

Of 383 metropolitan areas, Wichita ranked 347 for growth from 2016 to 2017.

Per capita personal income in the Wichita MSA for 2017 was $47,708 in current dollars, up 2.2 percent from $46,696 in 2016. In inflation-adjusted dollars, per capita personal income grew by 0.5 percent from 2016 to 2017. This growth rate ranked at position 327 among 383 metropolitan areas.

BEA offers these definitions:

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes). Comparisons for different regions and time periods reflect changes in both the price and quantity components of regional personal income.

The estimate of personal income for the United States is the sum of the state estimates and the estimate for the District of Columbia; it differs slightly from the estimate of personal income in the national income and product accounts (NIPAs) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data.

Per capita personal income is calculated as the total personal income of the residents of a given area divided by the population of the area. In computing per capita personal income, BEA uses Census Bureau mid-year population estimates.

Wichita city government

More Wichita planning on tap

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We should be wary of government planning in general. But when those who have been managing and planning the foundering Wichita-area economy want to step up their management of resources, we risk compounding our problems.

As announced by the City of Wichita, “In response to recent recommendations from Project Wichita and the Century II Citizens Advisory Committee, community organizations and their leadership are stepping forward to take the next step to create a comprehensive master plan and vision that connects projects and both banks of the Arkansas River.”

The city says these organizations will be involved:

We should note that these organizations have been responsible for developing the Wichita-area economy for many years. Despite recent developments like Cargill and Spirit Aerosystems, the Wichita economy has performed below the nation. While improving, our economic growth is perhaps half the national rate, and just two years ago Wichita lost jobs and population, and economic output fell.

Thus, the question is this: Why these organizations?

Then, recent behavior by the city, specifically surrounding the new ballpark, has resulted in a loss of credibility. Few seem happy with the city’s conduct. To this day, we still do not know the identities of the partners except for one.

In the future, can we trust the city and its partners are telling us the truth, and the whole truth?

Then, there are the problems with government planning. Randal O’Toole is an expert on the problems with government planning. His book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future

Planning seems like a good thing. But O’Toole tells us the problem with government plans: “Everybody plans. But private plans are flexible, and we happily change them when new information arises. In contrast, special interest groups ensure that the government plans benefiting them do not change — no matter how costly.”

He continues: “Like any other organization, government agencies need to plan their budgets and short-term projects. But they fail when they write comprehensive plans (which try to account for all side effects), long-range plans (two to 50 years or more), or plans that attempt to control other people’s land and resources. Many plans try to do all three.”

Other problems with government planning as identified by O’Toole (and many others):

  • Planners have no better insight into the future than anyone else
  • Planners will not pay the costs they impose on other people
  • Unlike planners, markets can cope with complexity

Some will argue that the organizations listed above are not government entities and shouldn’t exhibit the problems inherent with government planning. But their plans will undoubtedly need to be approved by, and enforced by, government.

Further, some of these organizations are funded substantially or nearly entirely by government, are in favor of more government (such as higher taxation and regulation), and campaign vigorously for candidates who support more taxes and planning.

Following, from Randal O’Toole as published in 2007.

Government Plans Don’t Work

By Randal O’Toole

Unlike planners, markets can cope with complexity and change.

After more than 30 years of reviewing government plans, including forest plans, park plans, watershed plans, wildlife plans, energy plans, urban plans, and transportation plans, I’ve concluded that government planning almost always does more harm than good.

Most government plans are so full of fabrications and unsupportable assumptions that they aren’t worth the paper they are printed on, much less the millions of dollars taxpayers spend to have them written. Federal, state, and local governments should repeal planning laws and shut down planning offices.

Everybody plans. But private plans are flexible, and we happily change them when new information arises. In contrast, special interest groups ensure that the government plans benefiting them do not change — no matter how costly.

Like any other organization, government agencies need to plan their budgets and short-term projects. But they fail when they write comprehensive plans (which try to account for all side effects), long-range plans (two to 50 years or more), or plans that attempt to control other people’s land and resources. Many plans try to do all three.

Comprehensive plans fail because forests, watersheds, and cities are simply too complicated for anyone to understand. Chaos science reveals that very tiny differences in initial conditions can lead to huge differences in outcomes — that’s why megaprojects such as Boston’s Big Dig go so far over budget.

Long-range plans fail because planners have no better insight into the future than anyone else, so their plans will be as wrong as their predictions are.

Planning of other people’s land and resources fails because planners will not pay the costs they impose on other people, so they have no incentive to find the best answers.

Most of the nation’s 32,000 professional planners graduated from schools that are closely affiliated with colleges of architecture, giving them an undue faith in design. This means many plans put enormous efforts into trying to control urban design while they neglect other tools that could solve social problems at a much lower cost.

For example, planners propose to reduce automotive air pollution by increasing population densities to reduce driving. Yet the nation’s densest urban area, Los Angeles, which is seven times as dense as the least dense areas, has only 8 percent less commuting by auto. In contrast, technological improvements over the past 40 years, which planners often ignore, have reduced the pollution caused by some cars by 99 percent.

Some of the worst plans today are so-called growth-management plans prepared by states and metropolitan areas. They try to control who gets to develop their land and exactly what those developments should look like, including their population densities and mixtures of residential, retail, commercial, and other uses. “The most effective plans are drawn with such precision that only the architectural detail is left to future designers,” says a popular planning book.

About a dozen states require or encourage urban areas to write such plans. Those states have some of the nation’s least affordable housing, while most states and regions that haven’t written such plans mostly have very affordable housing. The reason is simple: planning limits the supply of new housing, which drives up the price of all housing and leads to housing bubbles.

In states with growth-management laws, median housing prices in 2006 were typically 4 to 8 times median family incomes. In most states without such laws, median home prices are only 2 to 3 times median family incomes.

Few people realize that the recent housing bubble, which affected mainly regions with growth-management planning, was caused by planners trying to socially engineer cities. Yet it has done little to protect open space, reduce driving, or do any of the other things promised.

Politicians use government planning to allocate scarce resources on a large scale. Instead, they should make sure that markets — based on prices, incentives, and property rights — work.

Private ownership of wildlife could save endangered species such as the black-footed ferret, North America’s most-endangered mammal. Variably priced toll roads have helped reduce congestion. Pollution markets do far more to clean the air than exhortations to drive less. Giving people freedom to use their property, and ensuring only that their use does not harm others, will keep housing affordable.

Unlike planners, markets can cope with complexity. Futures markets cushion the results of unexpected changes. Markets do not preclude government ownership, but the best-managed government programs are funded out of user fees that effectively make government managers act like private owners. Rather than passing the buck by turning sticky problems over to government planners, policymakers should make sure markets give people what they want.

Wichita city government

State of the City, Wichita: Employment strength

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Wichita Mayor Jeff Longwell’s State of the City video relies on flimsy evidence and plucks scant good news from a sea of bad. This is a problem.

Recently Wichita Mayor Jeff Longwell delivered the State of the City video. It was posted to YouTube on March 28, 2019, and may be viewed here.

In this video, the mayor said, “The recent Livability.com study measured employment rates strength over time, affordability, and community amenities.” This isn’t the first time the mayor and other city officials have mentioned this study, if we can even call it that. 1 In January, a tweet from the official @CityofWichita Twitter account contained: “We have been named one of the top two recession-proof cities in the nation by @Livability. Wichita was praised for its ability to withstand turbulence in the national economy, steady job growth and the state’s low income-to-debt ratio.” 2

What does the data tell us? The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials, including Mayor Longwell, tout “steady job growth,” relying on a study that obviously isn’t based on evidence.

Click for larger.

The mayor also said: “Wichita’s unemployment rate is at a historically low 3.5%, and WSU forecasts that Wichita is expected to see an across-the-board increase in overall jobs this year.”

Look at the data. In this table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth,” as Wichita officials proclaim. It is stagnation.

It’s not only employment that has been bad news. In 2017 the Wichita economy contracted, which is the definition of a recession. 3 Personal income has grown only slowly. 4

Regarding jobs, the mayor accurately reports what the Center for Economic Development and Business Research at Wichita State University forecast said: Jobs are forecast to rise in Wichita for 2019. 5 Specifically, the report said: “Wichita is estimated to add approximately 2,500 jobs in 2018, and growth is projected to increase modestly to 0.9 percent in 2019, with more than 2,700 new jobs added.”

Is 0.9 percent job growth good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018. 6 Nationally, job growth is forecast at 1.7 percent for 2019. 7 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate.

It’s good news that jobs are set to grow rather than shrink. But in a surging national economy, that’s setting a low standard for success.

What’s unfortunate is the mayor and city promote things like this as good news. But when we use readily accessible data from sources like the Bureau of Labor Statistics (part of the United States Department of Labor) and Bureau of Economic Analysis (a division of the United States Department of Commerce), we easily see that we’re not being told the entire story. “Recession-proof” glosses over recent years of declining production. “Historically low” unemployment rates ignore a stagnant and declining labor force. “An across-the-board increase in overall jobs this year” doesn’t contextualize that the forecast rate of growth for Wichita is anemic compared to the nation.

What we need to know is this: Are the mayor and city officials aware of the actual statistics, or are they ignorant?

—
Notes

  1. Weeks, Bob. Wichita, a recession-proof city. Available at https://wichitaliberty.org/wichita-government/wichita-recession-proof-city/. ↩
  2. Twitter, January 22, 2019. https://twitter.com/CityofWichita/status/1087832893274157059. ↩
  3. “For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.” Weeks, Bob. Wichita economy shrinks, and a revision. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks-and-revision/. ↩
  4. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.” Weeks, Bob. *Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/. ↩
  5. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
  6. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩
  7. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook. ↩
Economics

Wichita jobs and employment, March 2019

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For the Wichita metropolitan area in March 2019, jobs are up, the labor force is up, and the unemployment rate is unchanged when compared to the same month one year ago. Seasonal data shows a small decline in jobs from February.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving, but also mixed, employment situation for the Wichita Metropolitan Statistical Area.

Click charts and tables for larger versions.

Total nonfarm employment rose from 296,000 last March to 300,700 this March. That’s an increase of 4,700 jobs, or 1.6 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.7 percent.

The unemployment rate in March 2019 was 3.9 percent, the same as one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by persons (0.0 percent) in March 2019 from February 2019, the number of unemployed persons rose by 149 (1.3 percent), and the unemployment rate rose from 3.7 percent to 3.8 percent. The number of employed persons not working on farms fell to 299,597 in March from 299,738 the prior month, a decline of 141 persons, or 0.0 percent.

The following chart of the monthly change in labor force and employment shows a general decline over the past year, with some recent months of losses for both measures.

The following chart of changes from the same month one year ago shows recent declines in the rate of growth.

Looking at the charts of changes in employment year-over-year, we see some months in the past year where Wichita outperformed the nation. That last happened in 2012.

Wichita city government

State of the City, Wichita: The bright future

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Wichita Mayor Jeff Longwell’s State of the City video doesn’t seem to be based on reality.

Recently Wichita Mayor Jeff Longwell delivered the State of the City video. It was posted to YouTube on March 28, 2019, and may be viewed here.

Not long into the address, the mayor says, “… we must embrace the challenges we face and forge ahead into the bright future that is just around the corner.”

Wichita MSA population, percent change from prior year. Click for larger.
On that bright future: Since the mayor spoke, learned that the Wichita metropolitan area lost population during the year ending July 1, 2018. 1 So at the time of the address, Longwell didn’t know the area had lost population, but he should have known that the trend of population growth has been slowing, as can be seen in the nearby chart.

What about the population of Wichita city proper, as that is the jurisdiction the mayor was elected to represent? (It’s better to look at the MSA, for a number of reasons. 2 For one, several major “Wichita” employers are not located within the Wichita city limits. Major portions of Spirit Aerosystems, for example, lie outside the city, and the city certainly takes credit for job creation there.)

Wichita and top 100 city population, annual change. Click for larger.
City populations are available through July 1, 2017. 3 From 2011 to 2017, the top 100 cities averaged annual growth of 1.03 percent. For the City of Wichita, the average was 0.29 percent, barely more than one-fourth the rate. (Wichita was the 50th largest city in 2017.) The trendline of growth for Wichita is down, as it is for the top 100 cities in general.

We have to ask: With a population growing much slower than the nation — and declining in the most recent year — what is the future of Wichita?

More importantly: Is Mayor Longwell aware of these statistics, and if so, why does he not recognize them? I hope this isn’t what he means by “embrace the challenges.”

—
Notes

  1. Weeks, Bob. Wichita population falls; outmigration continues. Available at https://wichitaliberty.org/wichita-government/wichita-population-falls-outmigration-continues/. ↩
  2. Weeks, Bob. Wichita metropolitan area population in context. Available at https://wichitaliberty.org/wichita-government/wichita-metropolitan-area-population-in-context/. ↩
  3. Annual Estimates of the Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2017 Population: April 1, 2010 to July 1, 2017 U.S. Census Bureau, Population Division. Release Date: May 2018 ↩
Economics

Wichita aerospace manufacturing concentration

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Wichita leaders want to diversify the area economy. Has there been progress?

One way to measure concentration of an industry in a location is by the proportion of employment in that industry. The Bureau of Labor Statistics provides employment by industry for metropolitan areas. I’ve gathered the data for the Wichita MSA for two industries: Aerospace Product and Parts Manufacturing (NAICS code 3364) and all manufacturing. I’ve gathered this data for the Wichita Metropolitan Statistical Area and compare it to total private sector employment. This data is not adjusted for seasonality, as some is available only in that manner.

Click for larger.
Click for larger.

As the charts illustrate, there was a large shift in the two industry’s share of employment around the time of the Great Recession. Since then, the ratios have been more stable, with a slow decline until a small reversal of that trend over the last year.

The chart of employment ratio changes from the same month one year ago confirms: Manufacturing and aerospace employment has grown faster than total private employment in the recent year or so.

Click for larger.

Another way to measure concentration of an industry is through location quotients. The Bureau of Labor Statistics provides these, most notably for counties as part of the Quarterly of Census and Wages. 1 As described by BLS, “Location quotients are useful for studying the composition of jobs in an area relative to the average, or for finding areas that have high concentrations of jobs in certain occupations. As measured here, a location quotient shows the occupation’s share of an area’s employment relative to the national average.” 2

Further: “For example, a location quotient of 2.0 indicates that an occupation accounts for twice the share of employment in the area than it does nationally, and a location quotient of 0.5 indicates the area’s share of employment in the occupation is half the national share.”

This data is available by industry. I’ve gathered data for Aerospace Product and Parts Manufacturing (NAICS code 3364) for Sedgwick County and present it in a nearby chart.

First, note that the location quotient is large, 30 or more. This means the concentration of workers in this industry in Sedgwick county is over 30 times the concentration nationwide.

Second, the location quotient fell from 2007 through 2014. Since then, it has been steady.

Has the Wichita area diversified its economy? Based on these two measures, the answer is yes. That increased in diversity happened at the same time as a large decline in aviation-related employment, that decline being larger than the decline in all Wichita-area private-sector employment. That was not planned or desired. It was a result of worldwide trends. But since then, concentration in aviation-related employment has changed little, and shows signs of increasing concentration.

From General Aviation Manufacturers Association.

—
Notes

  1. Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Available at https://www.bls.gov/cew/datatoc.htm. ↩
  2. Bureau of Labor Statistics. Using Location Quotients to Analyze Occupational Data. Available at https://www.bls.gov/oes/highlight_location_quotients.htm. ↩
Wichita city government

Wichita population falls; outmigration continues

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The population of the Wichita MSA fell from 2017 to 2018, and net domestic migration continues at a high level.

New data from the United States Census Bureau shows the Wichita Metropolitan Statistical Area losing population from July 1, 2017, to July 1, 2018.

The population estimate for 2017 was 645,628, and for 2018, 644,888. This is a decline of 740 persons, or -0.11 percent. Population changes in the seven years before 2018 averaged 0.30 percent each year.

The Wichita MSA ranked 89th largest among 383 metro areas, falling from rank 82 as recently as 2011.

Net domestic migration for the Wichita metro area showed a loss of 3,023 persons, or 0.47 percent of the population. This change, on a proportional basis, was 301st among the 383 metro areas. It is less than the loss of 3,235 persons the year before.

Click charts for larger versions.

Wichita MSA population and change from prior year.
Wichita MSA population, percent change from prior year.
Rank of Wichita MSA population.
Rank of Wichita MSA population one-year change.
Wichita MSA net domestic migration.
Economics

Wichita jobs and employment, February 2019

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For the Wichita metropolitan area in February 2019, jobs are up, the labor force is up, and the unemployment rate is down when compared to the same month one year ago. Seasonal data shows a return to job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

Total nonfarm employment rose from 295,400 last February to 300,700 this February. That’s an increase of 5,300 jobs, or 1.8 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.7 percent.

The unemployment rate in February 2019 was 3.9 percent, down from 4.2 percent from one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 1,115 persons (0.4 percent) in February 2019 from January 2019, the number of unemployed persons fell by 64 (-0.5 percent), and the unemployment rate fell from 3.9 percent to 3.8 percent. The number of employed persons not working on farms rose to 300,080 in February from 298,01 the prior month, an increase of 1,179 persons, or 0.4 percent.

Looking at the charts of changes in employment year-over-year, we see some months in the past year where Wichita outperformed the nation. That last happened in 2012.

Click charts for larger versions.

Wichita city government

Pay no attention to the Ferris wheel on the riverbank

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When the City of Wichita shows architectural renderings, are we to treat them as promises, or as someone’s unrealizable dream?

Click for larger.
A rendering of the new Wichita baseball stadium and environs shows — prominently — a large Ferris wheel. Is this something Wichitans and visitors can look forward to?

No, as Wichita City Council Member Cindy Claycomb (district 6, north central Wichita) found out when she asked, there will be no Ferris wheel on the banks of the Arkansas River in downtown Wichita.

Or maybe not. On Facebook, Council Member Bryan Frye (district 5, west and northwest Wichita) wrote, “Doesn’t mean that a Ferris Wheel can’t happen somewhere else in the footprint.”

Of course, there could also be a roller coaster and a petting zoo with unicorns.

So what is the value of architectural renderings like this? Does the existence of a Ferris wheel constitute a promise to deliver?

It’s not like the city showed a Ferris wheel that’s 100 feet tall but delivered one just 75 feet tall. Maybe we could excuse that.

But there will be no Ferris wheel.

I don’t know who created the illustration with the Ferris wheel, but someone in authority at Wichita city hall included it in a presentation to the city council and people of Wichita.

Things like this are meant to generate excitement and enthusiasm. But this is done by making false promises.

Since we know there is no Ferris wheel, what else in the illustration is just sizzle without substance?

And when the city shows renderings of the next project (performing arts center, convention center, etc.), will we have to figure out what is real, and what is only vaportecture?

Wichita city government

In Wichita, we don’t know who we’re dealing with

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Wichita takes a big risk entering in a public-private partnership without knowing its partners.

When entering a public-private partnership, the City of Wichita tells us it vets its partners thoroughly. But this can’t be the case for the partners in the new Wichita baseball stadium and surrounding land.

That’s because we don’t know the identities of all the partners. All we know is that one Lou Schwechheimer is a majority owner. When asked what proportion of the team he owns, the city replied, “Over 50%.” Either the city does not know the number, or is not willing to tell us. 1 There’s a big difference between owning 51 percent of something and, say, 95 percent.

We are supposed to learn these names at some time. The development agreement passed by the city council on March 19, 2019 holds this:

Section 2.03 Conditions to the Effectiveness of this Agreement. Contemporaneously with the execution of this Agreement, and as a precondition to the effectiveness of this Agreement, to the extent they have not already done so, the Developer will submit the following documents to the City:
…
(c) the identity of the manager of the general partner of the Developer;
(d) a list of the Principals of the Developer

I’ve asked the city when the agreement might be executed and become effective.

Once the city receives the names, will it release them to the public? If we’ve learned anything lately, we know the city withholds information from the public. Even when it does not need to.

Will the list of principals reveal the share of ownership of each of the principals?

Is the list of principals that own the team the same as the owners of the surrounding land the city is selling?

What if we don’t like principals? What if they have unsavory reputations or a poor business and credit history? What do we do then?

—
Notes

Wichita city government

Wichita considers a new stadium

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The City of Wichita plans subsidized development of a sports facility as an economic driver. Originally published in July 2017.

West Bank Redevelopment District. Click for larger.
This week the Wichita City Council will consider a project plan for a redevelopment district near Downtown Wichita. It is largely financed by Tax Increment Financing and STAR bonds. Both divert future incremental tax revenue to pay for various things within the district.1 2

City documents promise this: “The City plans to substantially rehabilitate or replace Lawrence-Dumont Stadium into a multi-sport athletic complex. The TIF project would allow the City to make investments in Lawrence-Dumont Stadium, construct additional parking in the redevelopment district, initiate improvements to the Delano multi-use path and make additional transportation improvements related to the stadium project area. In addition to the stadium work, the City plans to construct, utilizing STAR bond funds, a sports museum, improvements to the west bank of the Arkansas River and construct a pedestrian bridge connecting the stadium area with the Century II block. The TIF project is part of the overall plan to revitalize the stadium area and Delano Neighborhood within the district.”3

We’ve heard things like this before. Each “opportunity” for the public to invest in downtown Wichita is accompanied by grand promises. But actual progress is difficult to achieve, as evidenced by the examples of Waterwalk, Kenmar,and Block One.4

Trends of business activity in downtown Wichita. Click for larger.
In fact, change in Downtown Wichita — if we’re measuring the count of business firms, jobs, and payroll — is in the wrong direction, despite large public and private investment. 5

Perhaps more pertinent to a sports facility as an economic growth driver is the Intrust Bank Arena. Two years ago the Wichita Eagle noted the lack of growth in the area. 6 Since then, not much has changed. The area surrounding the arena is largely vacant. Except for Commerce Street, that is, and the businesses located there don’t want to pay their share of property taxes. 7

I’m sure the city will remind us that the arena was a Sedgwick County project, not a City of Wichita project, as if that makes a difference. Also, the poor economic performance cited above is for Downtown Wichita as delineated by zip code 67202, while the proposed baseball stadium project lies just outside that area, as if that makes a difference.

By the way, this STAR bonds district is an expansion of an existing district which contains the WaterWalk development. That development has languished, with acres of land having been available for development for many years. We’ve also found that the city was not holding the WaterWalk developer accountable to the terms of the deal that was agreed upon, to the detriment of Wichita taxpayers. 8

Following, selected articles on the economics of public financing of sports stadiums.

The Economics of Subsidizing Sports Stadiums

Scott A. Wolla, “The Economics of Subsidizing Sports Stadiums,” Page One Economics, May 2017. This is a project of the Federal Reserve Bank of St. Louis. Link.
“Building sports stadiums has an impact on local economies. For that reason, many people support the use of government subsidies to help pay for stadiums. However, economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs. Consumers who spend money on sporting events would likely spend the money on other forms of entertainment, which has a similar economic impact. Rather than subsidizing sports stadiums, governments could finance other projects such as infrastructure or education that have the potential to increase productivity and promote economic growth.”

What economists think about public financing for sports stadiums

Jeff Cockrell, Chicago Booth Review, February 01, 2017. Link.
“But do the economic benefits generated by these facilities — via increased tourism, for example — justify the costs to the public? Chicago Booth’s Initiative on Global Markets put that question to its US Economic Experts Panel. Fifty-seven percent of the panel agreed that the costs to taxpayers are likely to outweigh benefits, while only 2 percent disagreed — though several panelists noted that some contributions of local sports teams are difficult to quantify.”

Publicly Financed Sports Stadiums Are a Game That Taxpayers Lose

Jeffrey Dorfman. Forbes, January 31, 2015. Link.
“Once you look at things this way, you see that stadiums can only justify public financing if they will draw most attendees from a long distance on a regular basis. The Super Bowl does that, but the average city’s football, baseball, hockey, or basketball team does not. Since most events held at a stadium will rely heavily on the local fan base, they will never generate enough tax revenue to pay back taxpayers for the cost of the stadium.”

Sports Facilities and Economic Development

Andrew Zimbalist, Government Finance Review, August 2013. Link.
“This article is meant to emphasize the complexity of the factors that must be evaluated in assessing the economic impact of sports facility construction. While prudent planning and negotiating can improve the chances of minimizing any negative impacts or even of promoting a modest positive impact, the basic experience suggests that a city should not expect that a new arena or stadium by itself will provide a boost to the local economy.

Instead, the city should think of the non-pecuniary benefits involved with a new facility, whether they entail bringing a professional team to town, keeping one from leaving, improving the conveniences and amenities at the facility, or providing an existing team with greater resources for competition. Sports are central to cultural life in the United States (and in much of the world). They represent one of the most cogent ways for residents to feel part of and enjoy belonging to a community. The rest of our lives are increasingly isolated by modern technological gadgetry. Sport teams help provide identity to a community, and it is this psychosocial benefit that should be weighed against the sizeable public investments that sports team owners demand.”

Professional Sports as Catalysts for Metropolitan Economic Development

Robert A. Baade, Journal of Urban Affairs, 1996. Link.
“To attract or retain a team, cities are offering staggering financial support and rationalize their largesse on economic grounds. Do professional sports increase income and create jobs in amounts that justify the behavior of cities? The evidence detailed in this paper fails to support such a rationale. The primary beneficiaries of subsidies are the owners and players, not the taxpaying public.”

—
Notes

  1. Weeks, Bob. STAR bonds in Kansas. Available at https://wichitaliberty.org/kansas-government/star-bonds-kansas/. ↩
  2. Weeks, Bob. Wichita TIF projects: some background. Available at https://wichitaliberty.org/wichita-government/wichita-tif-projects-background/. ↩
  3. Wichita City Council, agenda packet for July 18, 2017. ↩
  4. Weeks, Bob. Downtown Wichita’s Block One, a beneficiary of tax increment financing. Before forming new tax increment financing districts, Wichita taxpayers ought to ask for progress on current districts. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-block-one-beneficiary-tax-increment-financing/. ↩
  5. Weeks, Bob. Downtown Wichita business trends. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-business-trends/. ↩
  6. “Ten years ago, Elizabeth Stevenson looked out at the neighborhood where a downtown arena would soon be built and told an Eagle reporter that one day it could be the ‘Paris of the Midwest.’ What she and many others envisioned was a pedestrian and bike-friendly neighborhood of quaint shops, chic eateries and an active arts district, supported by tens of thousands of visitors who would be coming downtown for sporting events and concerts. It hasn’t exactly turned out that way. Today, five years after the opening of the Intrust Bank Arena, most of the immediate neighborhood looks much like it did in 2004 when Stevenson was interviewed in The Eagle. With the exception of a small artists’ colony along Commerce Street, it’s still the same mix of light industrial businesses interspersed with numerous boarded-up buildings and vacant lots, dotted with ‘for sale’ and ‘for lease’ signs.” Lefler, Dion. 5 years after Intrust Bank Arena opens, little surrounding development has followed. Wichita Eagle. December 20, 2014. Available at http://www.kansas.com/news/local/article4743402.html. ↩
  7. Riedl, Matt. Has Commerce Street become too cool for its own good? Wichita Eagle. April 8, 2017. http://www.kansas.com/entertainment/ent-columns-blogs/keeper-of-the-plans/article143529404.html. ↩
  8. Weeks, Bob. Wichita WaterWalk contract not followed, again Available at https://wichitaliberty.org/wichita-government/wichita-waterwalk-agreement-not-followed/. ↩
Economics

Wichita and national jobs

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Growth of employment in Wichita compared to the nation.

Overall, since 2001 — roughly the end of the Great Recession — Wichita has been gaining jobs, evidence being its trend line above zero in the nearby chart which shows the change in jobs over the same month one year ago. But the line has not always been above zero, indicating months where the Wichita metropolitan area had fewer jobs than the year before.

Since that time, Wichita’s growth rate has almost always been below the nation’s rate, and by no small amount. The state of Kansas has been lagging behind the nation, too.

Click for larger.
Economics

Wichita jobs and employment, January 2019

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For the Wichita metropolitan area in January 2019, jobs are up, the labor force is up, and the unemployment rate is unchanged when compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth and a rising unemployment rate.

Data released this week by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area, although some areas are not improving.

Click for larger.

Total nonfarm employment rose from 292,900 last January to 297,900 this January. That’s an increase of 5,000 jobs, or 1.7 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 2.0 percent.

The unemployment rate in January 2019 was 4.1 percent, unchanged from one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 739 persons (0.2 percent) in January 2019 from December 2018, the number of unemployed persons rose by 769 6.8 percent), and the unemployment rate rose from 3.6 percent to 3.9 percent. The number of employed persons not working on farms fell to 299,090 in January from 299,120 the prior month, a decrease of 30 persons, or 0.0 percent.

BLS is revising some data and presented this monthly release in a slightly different format than usual.

Click charts for larger versions.

Wichita city government

Wichita city protections for ballpark land development

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The City of Wichita says it has safeguards built in to the proposed baseball park land development deal.

This week the Wichita City Council will consider a land development deal for land surrounding the new ballpark on the west bank of the Arkansas River downtown. The city assures us that there are safeguards in the deal that protect Wichitans.

We need safeguards. The city is borrowing to pay for the project, and the city expects to collect a lot of money from surrounding development, necessary to pay off the borrowed money. 1

To spur this development, the city plans to sell (about) 4.25 acres of land to the development team for $1 per acre. If the developer does not perform by building commercial space according to a schedule, the city can buy back land at that same price.

This — the buyback of the land — is promoted as security for the city. There are protections, the city tells us. The city also acknowledges that some past deals like WaterWalk have not had the type of protections built in to the ballpark deal.

But really: What is the value of the safeguards in the ballpark land deal?

If the ballpark developers fail (I’d like to name them, but we don’t know anything about them except for one person 2), the city can get its land back. But what then? Who pays the bonds? (Some of the borrowing is in the form of STAR bonds, which are not obligations of the city. But if these bonds went unpaid, it would be a very large and bad blot on the city’s reputation.)

The city says it would hurry to find another developer. But finding reputable developers willing to take over a failed effort might be difficult. Principal and interest must be paid during this time.

This doesn’t seem like much protection.

Walk away from WaterWalk

Critics of city development projects point to WaterWalk as an example of a failed downtown development. Some $41 million of city funds were spent there with few positive results, and with the recent closing of the Gander Mountain store, fortunes are not looking up.

But WaterWalk is different, the city says. In a recent social media town hall, the city stated, “Waterwalk wasn’t the deal we put together nor did it have the safeguards of this project. Waterwalk is not a city owned development.” 3

I guess it depends on the meaning of “we.” True, most city officials weren’t in office at the time of the WaterWalk deal. Accountability belongs to others is the attitude of Wichita Mayor Jeff Longwell and others.

But most of the people of Wichita are still here, and still waiting for the city’s promises to be realized.

While the city criticizes the WaterWalk deal for not having safeguards, the protections built in the baseball deal aren’t very strong. And while the city says “WaterWalk is not a city owned development,” neither is the ballpark land development deal. Remember, the city is selling the land.

The protections

In the Wichita city council agenda packet for March 19, 2019, we find this in item IV-1:

City grants the Developer an initial, exclusive right to purchase the Private Development Site for the development of the hospitality, commercial, retail, office and residential uses, as contemplated herein, for $1.00 an acre. This opportunity extends for ninety (90) days after the start of the first full season of the team’s residency in Wichita.

The next point requires the developer to exercise the purchase rights and meet a series of benchmarks, with a first phase of 30,000 square feet of development starting in 2021, with a second phase of 20,000 square starting the following year, and another 15,000 square feet after that.

Then the purported safeguards:

If the Developer fails to Commence Construction on any Phase by the appointed time or fails to complete construction of any Phase of development within the appointed time. The Developer can forestall a default by providing personal guarantees and making the CID and TIF shortfall payments. The Developer will also forfeit any right to any future phase of development. The City may repurchase any unaffected phase property for the original sale price. If the Developer fails to make the shortfall payments, the City may collect on the personal guarantees and exercise all legal remedies.

There is an escape clause:

Developer may provide personal guarantees reasonably satisfactory to the City as security that Developer will make the City whole for the lost revenue stream required to satisfy the state and local STAR bond repayments, CID and TIF District financing pro forma on an annual basis (Shortfall Payments).

As for accepting personal guarantees, we don’t know the identities of the developers, except for majority owner Lou Schwechheimer. 4 We don’t know the size of the share he owns, except the city tells us it is over 50 percent.

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Notes